July 7 (Bloomberg) -- Consumer confidence in the U.S.
receded from the highest level in 10 weeks as Americans’
perceptions of their finances and the economy dimmed.

The Bloomberg Consumer Comfort Index decreased to minus
45.5 for the period ended July 3 from minus 43.9 the prior week.
The drop was within the survey’s 3-point margin of error.

Unemployment hovering above 9 percent, limited wage growth
and falling home prices help explain why 54 percent said the
condition of their finances was either not so good or poor, the
survey showed. While cheaper gasoline prices and last week’s
stock market gains were reasons for optimism, consumers’ views
of the economy slipped to a three-month low.

“The risk to the recovery is that, should sentiment remain
depressed, whatever relief to consumer balance sheets is
provided by falling gasoline prices will not translate into a
pickup in household consumption,” said Joe Brusuelas, a senior
economist at Bloomberg LP in New York.

All three components in the Bloomberg survey fell. An index
of consumers’ views of the economy decreased to minus 80.9, the
worst showing since the week ended April 3, from minus 79.2 the
prior week.

The gauge of personal finances declined to minus 8.4, the
lowest in four weeks, from minus 5.5. The buying climate measure
was little changed at minus 47.1 after minus 46.9.

Faint ‘Pulse’

Consumers took “no cheer” from “a positive trend on Wall
Street or easing gas prices,” Gary Langer, president of Langer
Research Associates LLC in New York, which compiles the index
for Bloomberg, said in a statement. “Factors such as the job
market, the housing market and incomes hit much closer to home -
- and they’ve yet to show a pulse.”

The Standard & Poor’s 500 Index climbed 5.6 percent last
week, the biggest weekly gain since July 2009, after losing 7
percent since this year’s high on April 29.

Initial jobless claims last week fell by 14,000 to 418,000,
a level that shows faster job growth will take time, Labor
Department figures showed earlier today.

The jobless rate probably held at 9.1 percent in June,
according to the median forecast in a Bloomberg survey of
economists before the Labor Department report tomorrow.
Employers added 100,000 workers to their payrolls last month,
less than the 156,600 average monthly gain so far this year,
according to the survey median.

A report from ADP Employer Services indicated that
employment rebounded in June after slowing a month earlier.
Companies added 157,000 workers to payrolls last month after
36,000 in May, according to ADP data.

Stocks gained on signs employment and the economy would
strengthen in the second half. The S&P 500 Index rose 0.8
percent to 1,350.17 at 9:34 a.m. in New York.

Home Values

Home prices decreased 4 percent in the year ended in April,
the most in 17 months, the S&P/Case-Shiller index of property
values in 20 cities showed on June 28. The gauge was 33 percent
below its July 2006 peak.

The Bloomberg consumer comfort index has averaged minus
44.7 this year, compared with minus 45.7 for all of 2010 and
minus 47.9 in 2009, the year the last recession ended, the
report showed.

Church & Dwight Co., the maker of household products
including Arm & Hammer baking soda, is among companies concerned
about the outlook for demand.

“I’m really worried about the back half of this year as
far as consumer spending power” goes, James Craigie, chairman
and chief executive officer of the Princeton, New Jersey-based
company, said on a conference call with investors on June 29.
“Unemployment is creeping back up,” and budget constraints on
state and local governments “means more job cuts.”

Education Levels

Optimism among college graduates, while dipping to minus
31.2, was at the second-highest level since April 2009. Comfort
levels among people with less than a high-school education fell
to the lowest level in more than a month.

Confidence among Americans making $50,000 to $74,999 fell
to the lowest level since March, according to the survey.

The Bloomberg Consumer Comfort Index is based on responses
to telephone interviews with a random sample of 1,000 U.S.
residents age 18 and over. Each week, 250 respondents are asked
for their views on the economy, personal finances and buying
climate. Results are combined with data from the previous three
weeks, and the percentage of negative responses is subtracted
from the share of positive views on each question, with the
results then averaged.

The comfort index can range from 100, indicating every
participant in the survey had a positive response to all three
components, to minus 100, signaling all views were negative.

Field work for the index is done by Social Science Research
Solutions in Media, Pennsylvania.